The economic recovery after the financial crisis was sluggish.
Even ten years later, long-term effects were felt.
The head of the Federal Reserve, Jerome Powell, has been a central banker for ten years and has seen this development in a position of responsibility.
A common analysis of this period is that the administration of Barack Obama and Vice President Joe Biden underperformed on fiscal policy, while the Fed of Ben Bernanke and Janet Yellen tightened monetary policy too early.
Those responsible, who are still in office today, drew their conclusions when the pandemic hit them.
They announced an extraordinarily generous aid package for citizens and businesses and eased monetary policy.
Almost two years later we have the salad.
Core inflation is higher in America than in comparable developed countries, which supports two theses: the Biden administration has done too much of a good thing, the Powell Fed has denied it for too long.
But now the Fed has woken up.
It now wants to catch inflation again as quickly as possible.
She has a justified concern that people's and companies' ideas about future inflation are getting out of control.
Powell believes America's economy is strong enough to endure worsening financing conditions.
He draws his confidence from the data on the financial situation of households and companies.
It's actually not that bad.
On top of that, the labor market seems exceptionally healthy with an unemployment rate of 3.6 percent, doesn't it?
In fact, there are now almost two vacancies for every unemployed person of working age.
In order to keep their employees and recruit new ones, employers inevitably raise wages.
The danger is
that they will thereby trigger new rounds of price hikes that could be difficult to contain.
A soft landing for the American economy still seems possible.
But that is not guaranteed.
A recession seems more likely.